Recognize Inflation as the Dodge It Is

"Inflation's going to come roaring back." That's the endless refrain. And all I can say is, "That was the worry in 2007, when deflation was truly setting in. Then in 2008 it was obvious, yet the Fed's bias was still neutral." Lehman was the single most deflationary event of our lifetime. There has not been a single uptick in any asset around the world. Not one. Every time even oil lifts, it gives it back. Gold? I think it is a barometer of chaos.

But it doesn't matter -- these talking heads just keep talking inflation.

Here's what they don't know. What you have to be worried about is the nation itself -- can we even afford to stop these programs because of inflation when we are just now starting to see massive unemployment and we are just now seeing a collapse in commercial real estate?

Does anyone really think without government help we would be fine? I hear people saying commercial paper's thaw shows us that everything is fine. Are they kidding? Commercial paper is extremely short term. The fact that commercial paper is even in trouble is a sign of severe distress. Don't start cheering if commercial paper comes back. That's just nuts.

Further, everything good that has happened will be totally and completely nullified by 10% unemployment.

If you get unemployment that high and you're worried about inflation, you could doom us to a depression.

Now, there's another contingent that says we can't wait, we have to stop printing money now, we have to get rough. Here's another canard. Asset values like those in asset-backed paper -- which is just gone as an option -- go down daily.

It was inflation worries that got us into this. It will be inflation worries that keep us in this.

We were worried about the wrong kind of inflation in 2007 and 2008: oil, which was up on speculation.

We are worried about the wrong kind of inflation again in 2009: government money printing. We need to be worried about rampant joblessness, bankrupt cities, kids not being able to afford school. In another time, I would be saying, "We need to worry about society as a whole."

But the inflationists drone on. As they always have.

They got us into this mess.

They will keep us in it if we aren't careful.

Random musings: Coal's second-day move is bullish for Joy Global (JOYG - commentary - Cramer's Take). ... NYSE Euronext (NYX - commentary - Cramer's Take) works as accidental-high-yield play. ... Caterpillar (CAT - commentary - Cramer's Take) sure looks like it bottomed. ... JPMorgan (JPM - commentary - Cramer's Take) is well above where Dimon bought stock. ... Schlumberger (SLB - commentary - Cramer's Take) didn't give up its gains; my bad, I thought it would pause here.

At the time of publication, Cramer was long JPMorgan.

---

Know what you own: Cramer mentions mentions coal. Other companies in the industry include Arch Coal (ACI - commentary - Cramer's Take) and Bucyrus (BUCY - commentary - Cramer's Take).

ALL JIM CRAMER BLOG ENTRIES | POST A COMMENT | READ COMMENTS  

---

Jim Cramer is co-founder and chairman of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for Action Alerts PLUS. Watch Cramer on "Mad Money" weeknights on CNBC. To order Cramer's newest book -- "Jim Cramer's Stay Mad for Life: Get Rich, Stay Rich (Make Your Kids Even Richer)," click here. Click here to order "Mad Money: Watch TV, Get Rich," click here to order "Real Money: Sane Investing in an Insane World," click here to get "You Got Screwed!" and click here for Cramer's autobiography, "Confessions of a Street Addict." While he cannot provide personalized investment advice or recommendations, he appreciates your feedback and invites you to send comments by clicking here.

TheStreet.com has a revenue-sharing relationship with Amazon.com under which it receives a portion of the revenue from Amazon.com purchases by customers directed there from TheStreet.com.